TEA producer, Tanganda Tea Company Limited, has dropped Ernst & Young Chartered Accountants Zimbabwe as its auditors over differences regarding the interpretation of hyperinflationary financial reporting.
In January, Deloitte & Touche, who had been auditors of the company for more than 10 years, stepped down as the auditors in line with section 69(6) of the Zimbabwe Stock Exchange listings requirements.
Shareholders were then asked to appoint Ernst & Young as the auditors of the company for the ensuing financial year.
However, in a statement yesterday, Tanganda announced that it would be terminating its engagement with Ernst & Young as auditors for the year ended September 30, 2024.
The company said it had chosen Axcentium, formerly Deloitte Zimbabwe.
“Tanganda Tea Company Limited wishes to advise its valued shareholders and the investing public of the termination of the engagement of Ernst & Young Chartered Accountants (Zimbabwe) as auditors for the company for the year ending 30 September 2024 effective July 15, 2024, due to differences on certain technical matters regarding the interpretation and implementation of IAS 29 financial reporting in hyperinflationary economies,” Tanganda said.
“Axcentium [formerly Deloitte], who were the company’s previous auditors, have been reappointed as auditors of the company for the year ending September 30, 2024. The company received the approval of the Zimbabwe Stock Exchange to extend the audit services of Axcentium by one year, after which new auditors shall be contracted.”
The removal of Ernst & Young as auditors has to be ratified by Tanganda shareholders at an annual general meeting.
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In its half year financial report ended March 31, 2024, released last month, Tanganda chairman Herbert Nkala said the operating environment was expected to remain complex due to rapid policy changes and escalation of costs.
“The tax measures adopted in the 2024 budget have an impact of increasing the cost of production. The demand for our products remains relatively strong despite the impact of complex macro-economic factors on the local, regional and international markets. Sustainable market diversification will continue to be pursued to expand the regional and international markets,” he said.
“The company is optimistic that it has put in place mitigatory strategies to navigate the difficult terrain. Focus is on improving efficiencies across the company by re-engineering all processes and managing costs.”
